Credit Markets Overview: Latest Interest Rate Rumblings

Editor's Note: This week we introduce a monthly feature of Fixed-Income Forum, the Credit Markets Overview. Its purpose: To explain the trends that are determining interest rates for individual investors -- from bond and bond mutual-fund yields to money-market and mortgage interest rates.

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The credit markets in the fall of 2000 are in many respects a land of extremes. Nowhere is this more apparent than in the high-yield bond market, where amid weakening corporate earnings and falling stock prices, the default rate has moved up to its highest level since the start of the last recession in 1990. ...